Medically retired pension

[less stress please]

In 1994 my oh was medically retired from work . At the time he had a private pension which had been miss old to him as he had worked in a factory which had a private pension scheme .

 

In 2000 we contested this and won and he was just wrote a few letters really anyhow he got his pension and all was backdated.

 

These new pension reforms had got me thinking and I was sure he was never offered a tax free lump sum and the paperwork is in the least vague . We asked them to send us the pension pot fund figure as we never had it (195,225.88) so not small ! And it confirmed that we never took a tax free lump sum . We were never offered it!

 

What I am wondering is should we have been we do get a good pension but pay tax on it and had we took the lump sum would we have been better off? I would be grateful if anyone had any advice

Edited May 24, 2015 by honeybee13
Paras.

[honeybee13]

Hello there.

 

Would you mind confirming who is paying his pension please? I'm not sure from reading your post.

 

HB

[less stress please]

It's a prudential pension

[honeybee13]

Sorry, I'm still confused.

 

Your OH was in a company pension scheme, or was it a group personal pension that the company set up?

 

He was missold a personal pension because he was already in a scheme, is that right?

 

Which one do the Pru run please?

[less stress please]

Ok sorry he had a pru pension which was missold as the firm he worked for had a much better scheme and apparently he should have been in that . But got that sorted so now get a pension from the pru that would have matched what his employer would have given him . Does that make it any clearer ?

[less stress please]

Anyone? Have I given enough information

[honeybee13]

Hello again. Sorry, I've had a few issues of my own this week and haven't been back to your thread.

 

This isn't a situation I've come across often. Are you saying that the Pru didn't buy you back into the pension scheme that you would have been better off in?

 

So have they added to the plan you have with them to try and put you in the position you would have been in had you stayed in the company scheme?

 

What age was your OH when he started drawing the pension please?

 

HB

[less stress please]

thanks for the reply. Yes pru didnt buy him back into the pension scheme and added to the plan to put us back in the position we would have been in .

He was 36 as the pension got backdated until 1994 when he was medically retired from work.

 

The Letter we recieved at the time siad this

I am pleased to say we have now finalised our enquiries and calculations and are in a position to give further clarification to the offer of redress which you have already accepted.

The terms of this guarentee state that the benefits payable under this personal pension will not be lower in value than the benefits which would have been available from your employers OPS. I arriving at our assesment we have operated under our fair dealing policy and assumed you would have been granted early retirement ill healthpension effective from 5th march1994when your employment ceased. Accordingly the pension is based from 1994

We will pay you an immediate tax free lump sum of £61.271 This represents the difference between a tax free cashe sum available from your employers pension scheme and that available from the personal pension together with the arrears of pension due to you since 5th march 1994 and interest.

We will pay you an additional pension of £6,827.16 Which will increase by 3% per annum compound and will be paid monthly. A spouses pension equal to 50% of the value of this pension will be paid should you predecease you wife.

 

We got the letter last week saying no tax free lump sum was taken? yet this letter says slightly different .

At the time we were so pleased to have gotten the pension we never questioned anything . also we werent very knowlegeable on such matter either .

[honeybee13]

Hello again.

 

I'm surprised they offered a tax free lump sum if your OH was under retirement age, but I don't know all the rules for medical retirement.

 

I don't understand why you've had this letter now - is it out of the blue? Do you remember making the decision not to take tax-free cash in order to have a higher pension?

 

HB

[less stress please]

No never was asked about a lump sum ? I was enquiring about the tax we pay and with all this pension changes it got me thinking we're we offered it the letter of this year says no but the letter from years ago seems to say we were offered something ? Is it usual not to be offered a tax free lump sum when medically retired then?